Supply and Demand and Demand Curve

Topics: Supply and demand, Economics, Microeconomics Pages: 12 (2657 words) Published: May 2, 2013
BEA111 Online Quizzes 1-6
Quiz 1
1. Economics is best defined as the study of how
A. prices and quantities of goods and services are determined in markets B. private firms and households respond to taxes and subsidies C. people make choices in the presence of scarcity and the results of those choices. D. interest rates and exchange rates are determined

2. The scarcity principle implies that
A. people will never be satisfied with what they have
B. as wealth increases, making choices becomes less necessary C. the prices of scarce goods must rise due to excess demand D. choices must be made and tradeoffs will occur

3. The 'no-free-lunch' principle is another name for the
A. cost-benefit principle
B. the scarcity principle
C. the ceteris paribus principle
D. the marginal (not average) principle

4. You currently go to the gym three times each week. Each visit costs you $15 and you get $90 worth of benefits from your current weekly gym routine. Given this information A. you should go to the gym a fourth time each week

B. you should reduce the number of times you go to the gym each week C. you should not change your gym routine
D. it is impossible to say whether you should go to the gym more often than three times a week

5. To earn her allowance of $30 Janie must either mow the lawn or wash clothes. She dislikes both chores, but prefers working outdoors. If both jobs take the same amount of time Janie will choose to mow because the ______________ is greater. A. marginal benefit

B. average benefit
C. economic surplus
D. opportunity cost

6. Suppose Xena is willing to pay $1,000 for a new sword, but she is able to purchase one for $900. Her ___________ is __________. A. total benefit; $100
B. opportunity cost; $100
C. economic surplus; $1,000
D. economics surplus; $100

7. Ontel engineers proposed developing a 2 gigahertz microprocessor in early 1999 at a cost of $20 million for a working prototype. By mid 2000, the $20 million had been spent with no prototype yet developed. The engineers requested a further $10 million to complete the project. In early 1999 sunk costs of this project were __________ and in mid 2000 sunk costs were __________. A. 0; $20 million

B. 0; $30 million
C. $20 million; $20 million
D. $20 million; $30 million

8. The marginal cost of an activity is the
A. change in the costs of the activity that results from an extra unit of the activity B. always the same as the average cost of the activity
C. ratio of the total cost of the activity to the level of the activity D. change in the level of the activity divided by the change in the costs of the activity

9. What is the opportunity cost of living in a house that you already own? A. Zero, because you already own it
B. That depends on how much you like living there
C. The rent you could receive if you rented the house out to someone else D. The total amount you have to spend on maintenance, rates and insurance each year

10. The meaning of the ceteris paribus assumption is
A. hold everything constant.
B. vary all things at a constant rate
C. hold everything else constant.
D. hold one thing constant

Quiz 2

1. A market is
A. always associated with a particular physical location
B. a group of buyers and sellers who work together to produce the best outcome possible C. a group of sellers who work together to secure the best price possible. D. a group of buyers and sellers of a particular good

2. Which of the following statements is correct?
Substantial barriers to firms entering is characteristic of
A. a monopoly and monopolistic competition
B. monopoly and oligopoly
C. monopolisitic competition and oligopoly
D. perfect competition

3. Which of the following is not a characteristic of a perfectly competitive market A. Many buyers and sellers...
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